Oracle Slides After Weak Results, C-Suite Shakeup

Shares of database software maker Oracle Corp. fell 2 percent in premarket trading on Friday after the company posted disappointing quarterly earnings late Thursday and at the same time said Larry Ellison was stepping aside as chief executive.

Ellison, co-founder and leader of Oracle for 37 years, will be replaced by co-CEOs Safra Catz and Mark Hurd, although Ellison will remain executive chairman and chief technology officer.

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Oracle shares were down $1.05 at $40.50 in trading ahead of Friday's opening bell, and the stock was the No. 2 most active issue, with more than 850,000 shares changing hands.

At least two brokerages took negative actions on the stock after news of the management change and weak profit report.

"Database license sales were again negative (especially weak in the U.S.) ... Coupled with Larry Ellison's decision to give up the CEO role, our confidence in the core database business is getting tested," Deutsche Bank analysts said in a research note.

Deutsche downgraded the stock to "hold" from "buy" and cut its target price to $42 from $48.

Meanwhile, Barclays cut its price target to $48 from $50, but maintained a "buy" rating.

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According to Thomson Reuters data, the median price target for the stock among Wall Street analysts is $46.

Up to Thursday's close, stock had gained 8.6 percent this year, roughly in line with the broader market. Still, that lags the performance of most tech stocks this year, with the S&P 500's Technology Sector Index rising 14.6 percent by comparison.